Research On Audit Risk Of Related Transaction Of Listed Company In China

Related Transaction, which belongs to the neutral economic category theoretically, it neither belongs to simple market behavior, nor belongs to the category of the inside transaction. Nevertheless in the practical operation course, since the price of related transaction can be consulted and confirmed by both sides, it is apt to become the means of regulating profits or evading payment of duty, even for individuals to seek profits. In China, abusing related transaction becomes a severe problem, quite a lot of listed companies and majority shareholders utilize related transaction of unfairness to handle profits, to injure interests of medium and small investors seriously. In the meantime auditing of related transaction is definitely necessary. It will improve the quality of financial report, and prevent the administrative authority from utilizing related transaction to handle financial achievements or to seek the illegitimate benefits. Nowadays audit has entered into the stage of risk leading, the control of audit risk becomes the emphasis of audit. So, in my essay, which is made up of six parts, I will represent some discussions and solutions, such as: What are the signification and composition of audit risk of related transaction of listed company; what are the important factors influencing audit risk of related transaction of listed company in China; how to evade the risk initiatively, when CPA audit related transaction of listed company; how to reduce audit risk level through improve audit environment.First part is the foreword of the full text, I will describe the research background of my essay, the current study situation of relevant problem both in China and foreign countries, the main problems which my essay aim to resolve and the meaning of my essay in reality.In the second part, I will describe the current situation of the related transaction of listed company in China; describe content, characteristic, function and importance of auditing of related transaction; and conclude the intention, composition and characteristic of audit risk of related transaction.The third part and the fourth part, which are the key chapters, comprise some innovation. In the third part, I analyze the origin cause of formation of audit risk of related transaction of listed company in China from three aspects of inherent risk, control risk and detection risk, with combination of the actual present conditions of the capital market in China. In the fourth part, I put forward some methods of evading audit risk of related trade in auditing practice of CPA.In the fifth part, I provide some suggestions on reducing audit risk level of related transaction of listed company from the view of institutional improvement.In the sixth part, I summarize main conclusions of my essay and look forward to future research.